It is important to predict the behaviour of an aged concrete gravity dam during an earthquake and to assess its degraded capacity to withstand future earthquakes, so that remedial measures can be taken at the right time. The assessment of operating and ageing dams is more important, since the analyses procedures may become obsolete and state of the art may change since the time of construction. In this paper, an approach to include the time dependent degradation of concrete owing to environmental factors and mechanical loading in terms of isotropic damage index is presented. An effective numerical algorithm for seismic analysis of a concrete dam in the vicinity of an infinite reservoir with the application of damage mechanics considering fluid-structure interaction is presented. The performance of an aged dam with a known percentage of isotropic or orthotropic damage due to seismic excitation is studied.